Which lender is first to pass on the RBA rate cut?

The Reserve Bank of Australia has announced a cut in official interest rates (OCR) of 0.25 percentage points to 1 per cent.

Vadim Taube, chief executive of InfoChoice, said lenders are expected to announce cuts to their variable loan rates in coming days but not all will pass on the full .025 percentage points to retail borrowers.

“As rates get lower and lower, more banks will be reluctant to pass on the full RBA rate cuts.

One lender has already announced that it will be matching the RBA’s full 0.25 percentage point cut. That lender is online non-bank lender Athena.

Athena’s advertised variable home loan (for refinancers) has already been cut by 0.25 percentage points, matching the RBA cut, from 3.34 per cent p.a. (comparison rate 3.30 per cent)* to just 3.09 per cent p.a. (comparison rate 3.05 per cent).

Vadim Taube, chief executive of leading Australian financial comparison site InfoChoice, said other lenders are expected to announce cuts to their variable loan rates in coming days.

“As rates get lower and lower, more banks will be reluctant to pass on the full RBA rate cuts.

“If your lender withholds rate cuts, you don’t need to accept that, you can compare other lenders and find a better rate.

“There are now so many lenders offering variable headline home loan rates under four per cent it really is the perfect time to look at your mortgage and find a deal that could save you thousands of dollars.

“The squeaky wheel gets the oil,” said Vadim Taube, “Often if you find a better rate and ask your lender, they will turn around and offer you a better deal, just to keep you.

“Refinancing and switching to a new lender is not as hard as you might think and if you are on a variable rate loan product the exit fees are required to be reasonable.”

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